The role of published information in explaining stock prices An applied study of a sample of industrial companies listed on the Amman Stock Exchange during The period )2012-2020(

Abstract

This study aims to test the extent of the published information’s ability to explain the stock prices of industrial companies listed on the Amman Stock Exchange, by testing a set of financial and market indicators represented in: earnings per share, return on equity, return on assets, price to book value ratio, dividends per share, price earnings ratio and share turnover ratio. The study was based on a sample of institutions listed on the Amman Stock Exchange during the period 2012-2020. Using the panel data models, the main results of the applied study indicate that the most financial variables affecting the stock price are: earnings per share, return on equity and return on assets; the market variables affecting the stock price are: price to book value ratio and dividends Per Share. And that financial indicators are more capable of explaining the stock prices of industrial companies listed on the Amman Stock Exchange, with an explanatory power of 79.23%, compared to market indices, whose explanatory power was estimated at 44.48%.